Asia Rice-Thai traders hope for boost in shipments from Iraq deal

By Swati Verma

* India prices drop to $365-$370 a tonne from $368-$372

* Rains delay harvesting, damage paddies in many Indian states

* Bangladesh rice output may jump 2.27% in May-April- USDA

* Vietnam's jasmine rice prices climb to $520/tonne

By Swati Verma

BENGALURU, Nov 7 (Reuters) - Thai rice export prices were little changed this week, but traders hoped a deal with Iraq could bolster shipments, while lacklustre demand and a slightly weaker rupee weighed on rates for the Indian variety.

Local media on Wednesday reported Thailand signed a deal to sell rice to Iraq, nearly 10 years after losing contracts over quality concerns.

Traders said they hoped the new Iraqi market could jumpstart fresh demand for Thai rice.

Also, fresh supply, which is expected to enter the market in the coming weeks, could potentially bring down Thai prices, they added.

Thai exports have been hurt by the relatively higher prices for the variety from Thailand, especially compared with Vietnamese prices, mostly due to a strong baht -- Asia's best-performing currency this year, trader said.

One Thai trader said he was unable to sell any rice for more than one month because customers turned to cheaper options from Vietnam.

"It's been terrible. We've lost a lot of income," said another trader, who has been facing the same problem for three months.

Thailand's benchmark 5-percent broken rice <RI-THBKN5-P1> prices were quoted at $390-$408 a tonne, versus $390-$413 last week.

In Vietnam, rates for 5% broken rice <RI-VNBKN5-P1> were unchanged from last week at $345-$350 a tonne on Thursday amid lacklustre trading.

The country's export prices had risen to a four-and-a-half-month high last month.

"Low supplies at the end of the summer-autumn harvest have helped keep prices from falling," said a Ho Chi Minh City-based trader.

However, no deals were struck this week as most buyers were waiting for new supply from the autumn-winter harvest in the Mekong Delta, which is expected to come in bulk in December, another trader said.

"While prices of the regular 5% broken rice stayed flat, prices of jasmine rice have climbed up to $520 per tonne due to tight supplies," he added.

Top exporter India's 5 percent broken parboiled variety <RI-INBKN5-P1> was quoted around $365-$370 per tonne this week, down from $368-$372 last week.

"Demand is weak. We are waiting for the new season supplies that could rise from this month," said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Many rice growing states received rainfall in the last two weeks, which delayed harvesting and damaged paddy crops ready for harvesting, exporters said.

In Bangladesh, rice output is expected to jump 2.27% to 35.8 million tonnes in the May-April marketing year, thanks to favourable weather, the U.S. Department of Agriculture (USDA) said.

Rice imports are expected to hit 50,000 tonnes in the year to April, down 50% from a year earlier, USDA said in its latest report on Bangladesh, released this week. (Reporting by Phuong Nguyen in Hanoi, Patpicha Tanakasempipat in Bangkok, Ruma Paul in Dhaka and Rajendra Jadhav in Mumbai, Editing by Chizu Nomiyama)